After riding in Uber's self-driving car, I think Tesla will have some serious competition

We got behind the wheel of Uber's self-driving car, and it's
making us a little nervous for Tesla.

First, some context: Uber invited us down to Pittsburgh to try
out the driverless car that it's letting a select few hail in the
city starting Wednesday. The cars are in no way fully
autonomous, which is why a driver and engineer will sit up
front during the pilot.

But it's also a big milestone for driverless tech. Sure, people
have gotten to experience semi-autonomous systems in their cars
for a while now. (Let's not forget that things like automatic
braking are technically advents in autonomy.) But the company
that has arguably exposed people the most to driverless tech
prior to this Uber pilot is Tesla.

Tesla rolled out its 7.1 software update in January, which
offers safety features like automatic lane change and
collision avoidance. Tesla's latest software update, Version 8.0,
is slated to arrive in the coming weeks and will bring even more
improvements to Autopilot. Musk even stated it will make Tesla cars three times safer than other cars
on the road.

Tesla

Introducing autonomous features via a software update is a sound
approach. It means you can buy a Tesla now knowing that you can
make your car smarter with some extra pocket cash and the push of
a button. Tesla has done a great job branding itself as a sexy,
environmentally friendly, and innovative company. Its brand power
has even generated enough loyalty that almost 400,000 people pre-ordered the Model 3 two
years before it will even be delivered.

But there is a problem with Tesla's model. Mainly, that it's
expensive.

Tesla recently increased the price of its Autopilot from $2,500
to $3,000. That's on top of the $75,000 plus you are going to pay
for one of its cars.

You'll be hard pressed to find many people willing to shell out
over $2,500 on an already pricey car, which leads me to my
ultimate point: car ownership is dying.

Business Insider/Corey Protin

The traditional car model will become more obsolete as people
turn to ride-sharing services. Pair that with driverless
tech making cars more efficient and ride-hailing cheaper, it will
only make more sense in the next two decades or so to share a car
rather than own it.

It's why you see headlines like General Motors investing $500 million in Lyft. If you can
combine a well-established ride-sharing service with driverless
tech, that's the holy grail right there.

"When true self-driving is approved by regulators, it will mean
that you will be able to summon your Tesla from pretty much
anywhere," Musk wrote in the plan. "Once it picks you up, you
will be able to sleep, read or do anything else en route to your
destination."

But building a ride-sharing service from scratch is no easy feat.
That's where Uber has Tesla beat — not only is it developing
driverless tech that's getting better at tackling difficult
Pittsburgh terrain everyday, but it already has an established
customer base.

By exposing people to Uber's self-driving car early, the company
is prepping people for the inevitable reality of hailing a fully
autonomous Uber down the line. Uber is being smart by being the
first to introduce people to a self-driving, ride-hailing
service, and Musk's plan seems far too nebulous now to compete.